business news in context, analysis with attitude

The Arizona Republic reports on how Starbucks approaches the challenges implicit with enormous growth – with confidence in its ability to understand the consumer, tempered by the reality-check that comes from remembering that not everything the company has done has worked.

“In the 90s, the company experimented with several strategies for capitalizing on its hot brand,” the Republic writes. “Among the bigger ventures were attempts to open separate food-and-drink outlets: a full-service, sit-down restaurant called Café Starbucks, and a computer-friendly bar under the name Circadia.

“Starbucks also partnered with a few Web portals and pushed further into merchandise and media, including a periodical called Joe Magazine and a line of journals and desk supplies.”

Some analysts see parallels to these failed efforts when they look at current ventures such as its entry into movie and music marketing, and suggest that Starbucks could be taking its eye off the ball – which is selling $4 lattes.
KC's View:
One of the things we like most about Starbucks is illustrated in another passage from the Republic:

“Chairman Howard Schultz has long kept a rack of Joe Magazines in his office; workers poking around headquarters can still ferret out bottles of Mazagran, a discarded coffee and-soda drink that preceded today's bottled Frappuccinos.”

There’s nothing wrong with trying new things, with testing the limits of how far a brand can take you. We think that Schultz, CEO Jim Donald and the rest of Starbucks’ management has been rigorous about self-examination, about keeping their collective eye on the company’s central mission, while still experimenting whenever it seems to make sense.

Sure, to experiment is to risk defeat. But to do otherwise would be to risk stagnation.